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Changes to office residential Permitted Development Rights to be made permanent

30 November 2015

Changes to office residential Permitted Development Rights to be made permanent

Office to residential permitted development rights to be made permanent.

The ability to change use from class B1(a) offices to class C3 residential without requiring planning permission was first introduced as a temporary measure in May 2013, subject to exceptions and the obtaining of Prior Approval. The rights were set to expire on 30 May 2016.

The Government announced in October 2015, as part of measures unveiled under the Housing and Planning Bill that the right is to be made permanent.

Further, and perhaps controversially, the right will be extended to permit the demolition of office buildings and their replacement. This will be subject to limitations which are still to be disclosed, but we expect to see restrictions on increases in floorspace at the very least.

This should result in better quality residential floorspace for existing office buildings which are not ideal for adaptation. However, it remains to be seen whether the design of such replacement buildings will be subject to Prior Approval, which authorities may see as an opportunity to wrestle back control.

The Government's statement noted that almost 4,000 homes had so far been approved under the rights, although not all of those have been implemented. For those schemes already permitted, the deadline for completion will be extended to May 2019.

The law is still not settled on whether actual use or occupation by the deadline of more than a de minimis number of units is sufficient to preserve the right for an entire building to be converted without the need for further planning permission. No further clarity has been provided on this, but the additional period for implementation will be welcome.

Despite the additional level of dwellings created, the office-to-residential permitted right has certainly been controversial, particularly in light of the resulting loss of office space.

The Government has recognised the concern surrounding the economic consequences of their proposals on the 17 areas, with strategically important office space, which currently benefit from an exemption from the office to residential permitted development rights, including the City of London and the London Central Activities Zone.

From May 2019, these areas will no longer benefit from the exemption, but the relevant authorities have a window in which to make an article 4 direction to remove the rights.

There has been no shortage of evidence in recent months of commercial rents in London rising at a rapid rate due to scarce office space. The Government must carefully balance the need for housing against economic needs, to ensure that London's economic potential is not hindered.

Other unfavourable effects resulting from the office to residential rights include the inability to secure section 106 obligations from such schemes - an estimated 3,000 affordable units have been 'lost' from permitted development schemes outside of London alone. That trend seems set to continue.

Finally, the Government has also announced that it will introduce new rights enabling laundrettes and light industrial buildings to be converted for residential use. The changes will no doubt provide opportunities for landowners and developers.

Amendments to the General Permitted Development Order will be required through secondary legislation - we await further details.

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